In a previous article, I addressed the issue of retirees whose nest eggs have dropped to the point of threatening their long-term financial stability. I discussed two potential solutions: the Band-Aid approach, in which retirees make small living adjustments, and immediate annuities, which provide retirees a stable income. In this article, I will present a third solution: home equity.
The underlying index is designed to provide exposure to exchange-listed companies in developed markets that facilitate the demographic trend of longer average life spans and the aging of the global population, including but
Postponing claiming Social Security benefits is one way to increase inflation-protected retirement income.
Plus, Social Security benefits are adjusted annually to reflect increases in the Labor Department’s CPI-W, which measures inflation that affects blue-collar workers.
If you’re someone who is still accumulating assets for retirement, still working, the key things you want to look at would be your savings rate over the past year.
So, they might want to think about starting withdrawals in the low to mid-3% range, assuming that they have a balanced portfolio, a 30-year time horizon, and want a 90% degree of certainty of not outliving their assets.
Based on current reported returns, for every $100,000 Fred invests in a single premium immediate annuity, he could get $700 per month guaranteed income for life, amounting to a withdrawal rate of 8.4%.
The idea is to use dollars in 401(k) or IRA accounts to meet living expenses–or convert a portion of these assets to Roth IRA accounts–before claiming Social Security in years when your marginal tax rate is lower than it will be after you start to receive benefits.
Next Avenue: Your guide to the tricky tax rules of retirement Original Post>
